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Introduction to Linux - A Hands on Guide

This guide was created as an overview of the Linux Operating System, geared toward new users as an exploration tour and getting started guide, with exercises at the end of each chapter.
For more advanced trainees it can be a desktop reference, and a collection of the base knowledge needed to proceed with system and network administration. This book contains many real life examples derived from the author's experience as a Linux system and network administrator, trainer and consultant. They hope these examples will help you to get a better understanding of the Linux system and that you feel encouraged to try out things on your own.

I recommend Puppy Linux. It is designed specifically for beginner users with older hardware like yours. Also it runs entirely from CD-ROM so you don't need to "install" it to your computer--it will not replace or modify your existing Windows XP. Puppy will give you a fun and easy introduction to Linux.

You can use Slackware with XFCE or one of the smaller window-managers on that machine, in fact you should be able to use any distribution, if you choose a lightweight desktop environment, like XFCE, LXDE or Enlightenment. Alternatively you can choose to use a window-manager instead of a desktop environment, like IceWM, FVWM, JWM, one of the *boxes or a tiling WM.
My choices would be Slackware (XFCE or a WM), Debian (XFCE, LXDE or a WM), Xubuntu or Lubuntu (XFCE or LXDE), Vector (XFCE or a WM) and antiX (IceWM or Fluxbox).
There are more, this were just a few that came into my mind first.

EDIT: I will not recommend Puppy Linux here to learn Linux. It is not a multi-user distribution and therefore you always have to run it as root. This way you will not learn enough about user permissions, and also are permanently in danger to damage the installed system.

EDIT: I will not recommend Puppy Linux here to learn Linux. It is not a multi-user distribution and therefore you always have to run it as root. This way you will not learn enough about user permissions, and also are permanently in danger to damage the installed system.

Good point. It has been a while since I used Puppy so I forgot that fact. More info on Puppy's security recommendations: